Credit line for higher education students with mutual guarantee

Name of the instrument - Local language: Linha de crédito para estudantes do ensino superior com garantia mútua
Name of the instrument - English translation: Credit line for higher education students with mutual guarantee
Scheme ID: 181
Country: Portugal
Reporting year: 2015
Type of instrument: Loan
Type of entry: Single instrument

Short description: Loans for higher education students vary between EUR 1 000 and EUR 5 000 per academic year up to a maximum total amount of 25 000 (for 5 year university programme). The loans are repayable over a period of 6 to 10 years; the repayment starts one year after graduation. The loan is provided by retail banks. The State and provides loan guarantee and subsidises interest rate.
Short description of the related instruments: nap

Level of operation

National

Name of a part of the country

nap

Name of the region (for regional instruments)

nap

Name of the sector (for sectoral instruments)

nap

Relevance

Key scheme

Legal basis

Decree-Law n. 309-A/2007, from 7 September (Mutual guarantee schemes)

Objective(s) and target(s)

To promote increasing of Portuguese citizens' academic qualifications; to complement direct support from the State.

Year of implementation

2007

Operation/management

Commercial banks

Eligible group(s)

University students

Group(s) with preferential treatment

None

Education and training eligible

University programmes

Source of financing and collection mechanism

Banks (current financing - providing loans)
State (loan guarantee, interest rate subsidy)
Individual (repayment from future income)

Financing formula and allocation mechanisms

Loan amount: may vary between EUR 1 000 and 5 000 per year with the maximum amount of EUR 25 000 (for 5-year university programme).
The interest rate: fixed; subsidised by the State; set at 1.801% (compared to , for example, 5.2% in the Caixa Geral de Depositos); can be further reduced if the student has good results.
Repayment : starts 1 year after the prospective graduation; the loans are repayable over a period 6 to 10 years.

Eligible costs